REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this "Agreement") is made and entered into as
of
October 19, 2007, by and between Conversion Services International, Inc., a
Delaware corporation (the "Company"),
and
TAG
Virgin Islands, Inc.,
with an
address at The
Tunick Building,
0000
Xxxxxxx Xxxx, Xxxxx 000, Xx. Xxxxxx, XXXX 00000 as agent for the purchasers
listed on the Schedule
of Purchasers
appended
hereto as Schedule
I
(the
“Purchasers”).
This
Agreement is made pursuant to the Stock Purchase Agreement, dated as of October
19, 2007, by and between the Purchasers and the Company (as amended, modified
or
supplemented from time to time, the “Purchase
Agreement”).
The
Company and the Purchasers hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"Commission"
means
the Securities and Exchange Commission.
"Common
Stock"
means
shares of the Company's common stock, par value $0.001 per share.
“Effective
Date”
shall
mean the date the Commission shall declare a Registration Statement
effective.
"Effectiveness
Period"
shall
have the meaning set forth in Section
2(a).
"Exchange
Act"
means
the Securities Exchange Act of 1934 and any successor statute.
"Filing
Date"
means,
(i) with respect to the initial Registration Statement required to be filed
hereunder, a date no later than 120 days following the date hereof and (ii)
with
respect to shares of Common Stock issuable to the Holder as a result of
adjustments to the Exercise Price made pursuant to the Warrants or otherwise,
30
days after the occurrence such event or the date of the adjustment of the
Exercise Price, as the case may be.
"Holder"
or
"Holders"
means
each Purchaser or any of his affiliates or transferees to the extent any of
them
hold Registrable Securities.
"Indemnified
Party"
shall
have the meaning set forth in Section
5(c).
"Indemnifying
Party"
shall
have the meaning set forth in Section
5(c).
“Person”
means
an individual, partnership, limited liability company, corporation, joint stock
company, trust, estate, joint venture, association or unincorporated
organization, or any other form of business or professional entity,
"Proceeding"
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
"Prospectus"
means
the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"Purchase
Agreement"
shall
have the meaning provided above.
"Registrable
Securities"
means
the Shares and the shares of Common Stock issuable upon the exercise of the
Warrants.
"Registration
Statement"
means
each registration statement required to be filed hereunder, including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
"Rule
144"
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Rule
415"
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Rule
424"
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Securities
Act"
means
the Securities Act of 1933 and any successor statute.
“Shares”
means
the 1,875,000 shares of Common Stock purchased by the Purchasers pursuant to
the
terms of the Purchase Agreement on October
19, 2007.
"Trading
Market"
means
any of the NASD OTCBB, NASDAQ Capital Market, the Nasdaq National Market, the
American Stock Exchange or the New York Stock Exchange.
“Warrants”
means,
collectively, each Common Stock Purchase Warrant issued by the Company to the
Purchasers as of October 19, 2007 pursuant to the Purchase Agreement to the
extent such Common Stock Purchase Warrant is exercisable into shares of Common
Stock and such shares of Common Stock are not otherwise subject to an effective
Registration Statement.
-2-
2. Registration.
(a) On
or
prior to the Filing Date the Company shall prepare and file with the Commission
a Registration Statement covering the Registrable Securities for an offering
to
be made on a continuous basis pursuant to Rule 415. The Company shall cause
the
Registration Statement to become effective and remain effective as provided
herein. The Company shall use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof. The Company shall use its best efforts to
keep the Registration Statement continuously effective under the Securities
Act
until the date which is the earlier of when (i) all Registrable Securities
have
been sold or (ii) all Registrable
Securities
may be
sold immediately without registration under the Securities Act and without
volume restrictions pursuant to Rule 144(k), as determined by the counsel to
the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company's transfer agent and the affected Holders (the
"Effectiveness
Period").
(b) Within
three business days after the Effective Date of a Registration Statement, the
Company shall cause its counsel to issue a blanket opinion in the form attached
hereto as Exhibit
A,
to its
transfer agent stating that the Registrable Securities are subject to an
effective registration statement and can be reissued free of restrictive legend
upon notice of a sale by a Purchaser and confirmation by such Purchaser that
he
has complied with the prospectus delivery requirements, provided that the
Company has not advised the transfer agent orally or in writing that the opinion
has been withdrawn. Copies of the blanket opinion required by this Section
2(b)
shall be
delivered to each Purchaser within the time period set forth above.
3. Registration
Procedures.
If and
whenever the Company is required by the provisions hereof to effect the
registration of any Registrable Securities under the Securities Act, the Company
will use its best efforts to within 90 days after the date hereof:
(a) prepare
and file with the Commission the Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received
from the Commission, and use its best efforts to cause the Registration
Statement to become and remain effective for the Effectiveness Period with
respect thereto, and promptly provide to each Purchaser copies of all filings
and Commission letters of comment relating thereto;
(b) prepare
and file with the Commission such amendments and supplements to the Registration
Statement and the Prospectus used in connection therewith as may be necessary
to
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by the Registration Statement and to
keep
such Registration Statement effective until the expiration of the Effectiveness
Period;
-3-
(c) furnish
to each Purchaser such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as such
Purchaser reasonably may request to facilitate the public sale or disposition
of
the Registrable Securities covered by the Registration Statement;
(d) use
its
commercially reasonable efforts to register or qualify each Purchaser’s
Registrable Securities covered by the Registration Statement under the
securities or "blue sky" laws of such jurisdictions within the United States
as
such Purchaser may reasonably request; provided,
however,
that
the Company shall not for any such purpose be required to qualify generally
to
transact business as a foreign corporation in any jurisdiction where it is
not
so qualified or to consent to general service of process in any such
jurisdiction;
(e) list
the
Registrable Securities covered by the Registration Statement with any securities
exchange on which the Common Stock of the Company is then listed;
(f) immediately
notify each Purchaser at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event of
which
the Company has knowledge as a result of which the Prospectus contained in
such
Registration Statement, as then in effect, includes an untrue statement of
a
material fact or omits to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and
(g) make
available for inspection by each Purchaser and any attorney, accountant or
other
agent retained by such Purchaser, all publicly available, non-confidential
financial and other records, pertinent corporate documents and properties of
the
Company, and cause the Company's officers, directors and employees to supply
all
publicly available, non-confidential information reasonably requested by the
attorney, accountant or agent of such Purchaser.
4. Registration
Expenses.
All
expenses relating to the Company's compliance with Sections
2
and
3
hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including reasonable counsel fees) incurred
in connection with complying with state securities or "blue sky" laws, fees
of
the NASD, transfer taxes, fees of transfer agents and registrars, fees of,
and
disbursements incurred by, one counsel for the Holders (to the extent such
counsel is required due to Company's failure to meet any of its obligations
hereunder), are called "Registration Expenses." All selling commissions
applicable to the sale of Registrable Securities, including any fees and
disbursements of any special counsel to the Holders beyond those included in
Registration Expenses, are called "Selling Expenses." The Company shall only
be
responsible for all Registration Expenses.
-4-
5. Indemnification.
(a) In
the
event of a registration of any Registrable Securities under the Securities
Act
pursuant to this Agreement, the Company will indemnify and hold harmless each
Purchaser, and his officers, directors, trustees and each other Person, if
any,
who controls such Purchaser within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
Purchaser, or such Persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Securities were registered under the Securities
Act
pursuant to this Agreement, any preliminary Prospectus which has been printed
and distributed (i.e.
a “red
xxxxxxx Prospectus”) or final Prospectus related thereto, or any amendment or
supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading,
and
will reimburse such Purchaser, and each such Person for any reasonable legal
or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however,
that
the Company will not be liable in any such case if and to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made
in
conformity with information furnished by or on behalf of such Purchaser or
any
such Person in writing specifically for use in any such document.
(b) In
the
event of a registration of the Registrable Securities under the Securities
Act
pursuant to this Agreement, each Purchaser will indemnify and hold harmless
the
Company, and its officers, directors and each other Person, if any, who controls
the Company within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
Persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact which was furnished in writing by such Purchaser to the
Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus
or final Prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the
statements therein not misleading, and will reimburse the Company and each
such
Person for any reasonable legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action: provided,
however,
that
such Purchaser will be liable in any such case if and only to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
so
made in conformity with information furnished in writing to the Company by
or on
behalf of such Purchaser specifically for use in any such document.
Notwithstanding the provisions of this paragraph, no Purchaser shall be required
to indemnify any Person or entity in excess of the amount of the aggregate
net
proceeds received by such Purchaser in respect of Registrable Securities in
connection with any such registration under the Securities Act.
-5-
(c) Promptly
after receipt by a party entitled to claim indemnification hereunder (an
"Indemnified
Party")
of
notice of the commencement of any action, such Indemnified Party shall, if
a
claim for indemnification in respect thereof is to be made against a party
hereto obligated to indemnify such Indemnified Party (an "Indemnifying
Party"),
notify the Indemnifying Party in writing thereof, but the omission so to notify
the Indemnifying Party shall not relieve it from any liability which it may
have
to such Indemnified Party other than under this Section
5(c)
and
shall only relieve it from any liability which it may have to such Indemnified
Party under this Section
5(c)
if and
to the extent the Indemnifying Party is prejudiced by such omission. In case
any
such action shall be brought against any Indemnified Party and he/it shall
notify the Indemnifying Party of the commencement thereof, the Indemnifying
Party shall be entitled to participate in and, to the extent it shall wish,
to
assume and undertake the defense thereof with counsel satisfactory to such
Indemnified Party, and, after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume and undertake the defense
thereof, the Indemnifying Party shall not be liable to such Indemnified Party
under this Section
5(c)
for any
legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof. If the Indemnified Party shall thereafter retain
its
own counsel, then the Indemnified Party shall pay all fees, costs and expenses
of such counsel: provided,
however,
that,
if the defendants in any such action include both the indemnified party and
the
Indemnifying Party and the Indemnified
Party
shall
have reasonably concluded that there may be reasonable defenses available to
such Indemnified Party which are different from or additional to those available
to the Indemnifying Party or if the interests of the Indemnified Party
reasonably may be deemed to conflict with the interests of the Indemnifying
Party, the Indemnified Party shall have the right to select one separate counsel
and to assume such legal defenses and otherwise to participate in the defense
of
such action, with the reasonable expenses and fees of such separate counsel
and
other expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred.
(d) In
order
to provide for just and equitable contribution in the event of joint liability
under the Securities Act in any case in which either (i) a Purchaser, or any
officer, director, controlling Person or other affiliate of such Purchaser,
makes a claim for indemnification pursuant to this Section
5
but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial
of
the last right of appeal) that such indemnification may not be enforced in
such
case notwithstanding the fact that this Section
5
provides
for indemnification in such case, or (ii) contribution under the Securities
Act
may be required on the part of such Purchaser or such officer, director,
controlling Person or other affiliate of such Purchaser in circumstances for
which indemnification is provided under this Section
5;
then,
and in each such case, the Company and such Purchaser will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that such Purchaser
is
responsible only for the portion represented by the percentage that the public
offering price of his securities offered by the Registration Statement bears
to
the public offering price of all securities offered by such Registration
Statement; provided,
however,
that,
in any such case, (A) such Purchaser will not be required to contribute any
amount in excess of the public offering price of all such securities offered
by
him pursuant to such Registration Statement; and (B) no Person guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the Act)
will be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
-6-
6. Representations
and Warranties.
The
Company represents and warrants to each Purchaser that:
(a) The
Common Stock of the Company is registered pursuant to Section 12(b) or 12(g)
of
the Exchange Act and the Company has filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it
under the Securities Act and the Exchange Act (the “SEC
Documents”).
The
Company filed: (i) its Annual Report on Form 10-K and Form 10K/A for its fiscal
year ended December 31, 2006, (ii) its Quarterly Report on Form 10-Q for its
fiscal quarter ended June 30, 2007, and (iii) the Form 8-K filings which it
has
made during the fiscal year 2006 and 2007 to date (collectively, the
"SEC
Reports").
Each
SEC Report was, at the time of its filing, in substantial compliance with the
requirements of its respective form and none of the SEC Reports contain any
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein not misleading
in
light of the circumstances when made. To the best of the Company’s knowledge,
the financial statements of the Company included in the SEC Reports comply
as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission or other applicable rules
and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis during the periods involved (except (i) as may
be
otherwise indicated in such financial statements or the notes thereto or (ii)
in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed) and fairly present in all material respects
the
financial condition, the results of operations and the cash flows of the Company
and its subsidiaries, on a consolidated basis, as of, and for, the periods
presented in each such SEC Report. The Company is eligible to use a Registration
Statement on Form S-3 to register the Registrable Securities.
(b) The
Common Stock is listed for trading on the American Stock Exchange. While the
Company is not currently subject to delisting proceedings it will continue
to be
monitored by the American Stock Exchange on a quarterly basis for the reasons
disclosed in its SEC Reports.
(c) Neither
the Company, nor any of its affiliates, nor any Person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security
or
solicited any offers to buy any security under circumstances that would cause
the offering of the Securities pursuant to the Purchase Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from selling the Common Stock pursuant
to
Rule 506 under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or subsidiaries take any action or steps that would cause the offering of such
Securities to be integrated with other offerings.
-7-
(d) The
Shares and the Warrants and the shares of Common Stock that each Purchaser
may
acquire pursuant to the exercise of the Warrants are all restricted securities
under the Securities Act as of the date of this Agreement. The Company will
not
issue any stop transfer order or other order impeding the sale and delivery
of
any of the Registrable Securities at such time as such Registrable Securities
are registered for public sale or an exemption from registration is available,
except as required by federal or state securities laws.
(e) The
Company understands the nature of the Registrable Securities issuable upon
exercise of the Warrants and recognizes that the issuance of such Registrable
Securities may have a potential dilutive effect. The Company specifically
acknowledges that its obligation to issue the Registrable Securities is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the
Company.
(f) Except
for agreements made in the ordinary course of business, there is no agreement
that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material
respect.
(g) The
Company will at all times have authorized and reserved a sufficient number
of
shares of Common Stock for the full exercise of the Warrants.
7. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
(b) No
Piggyback on Registrations.
Except
as and to the extent specified in Schedule
7(b)
hereto,
neither the Company nor any of its security holders (other than the Holders
in
such capacity pursuant hereto) may include securities of the Company in any
Registration Statement other than the Registrable Securities, and the Company
shall not after the date hereof enter into any agreement providing any such
right for inclusion of shares in the Registration Statement to any of its
security holders. Except as and to the extent specified in Schedule
7(b)
hereto,
the Company has not previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person that
have not been fully satisfied.
-8-
(c) Compliance.
Each
Holder covenants and agrees that such Holder will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to the Registration
Statement.
(d) Discontinued
Disposition.
Each
Holder agrees by such Holder’s acquisition of such Registrable Securities that,
upon receipt of a notice from the Company of the occurrence of a Discontinuation
Event (as defined below), such Holder will forthwith discontinue disposition
of
such Registrable Securities under the applicable Registration Statement until
such Holder's receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement or until such Holder is advised in writing (the
"Advice")
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph. For purposes of this Section
7(d),
a
"Discontinuation
Event"
shall
mean (i) when the Commission notifies the Company whether there will be a
"review" of such Registration Statement and whenever the Commission comments
in
writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by
the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible
for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference untrue in any material respect or that requires any revisions to
such
Registration Statement, Prospectus or other documents so that, in the case
of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(e) Piggy-Back
Registrations.
If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under
the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to each Holder written notice of such determination and, if within
15
days after receipt of such notice, any such Holder shall so request in writing,
the Company shall include in such registration statement all or any part of
such
Registrable Securities such Holder requests to be registered to the extent
the
Company may do so without violating registration rights of others which exist
as
of the date of this Agreement, subject to customary underwriter cutbacks
applicable to all holders of registration rights and subject to obtaining any
required consent of any selling stockholder(s) to such inclusion under such
registration statement.
-9-
(f) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and the Holders of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to
the
rights of certain Holders and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates; provided,
however,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
(g) Notices.
Any
notice or request hereunder may be given to the Company or the Purchasers at
the
respective addresses set forth below or as may hereafter be specified in a
notice designated as a change of address under this Section
7(g).
Any
notice or request hereunder shall be given by pre-paid registered or certified
mail, return receipt requested, hand delivery, overnight mail, Federal Express
or other national overnight next day carrier (collectively, "Courier") or
telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party
to
whom it is addressed, in the case of those by mail or overnight mail, deemed
to
have been given three business days after the date when deposited in the mail
or
with the overnight mail carrier, in the case of a Courier, the next business
day
following timely delivery of the package with the Courier, and, in the case
of a
telecopy, when confirmed. The address for such notices and communications shall
be as follows:
|
If
to the Company:
|
Conversion
Services International, Inc.
000
Xxxxx Xxxx Xxxxxx
Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Chief
Financial Officer
Facsimile: 000-000-0000
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-10-
|
|
|
|
If
to the Purchasers:
|
TAG
Virgin Islands, Inc.
The
Tunick Building
0000
Xxxxxxx Xxxx
Xxxxx
000
Xx.
Xxxxxx, XXXX 00000
Attn: Xxxxx
Xxxxxxxxxxx, President
Facsimile:
(000) 000 0000
With
a copy to:
Xxxxx
Xxxxxx, Esq.
000
Xxxxxxxx Xxxxxx
Xxxxxxxx,
Xxx Xxxx 00000
Facsimile: (000)
000-0000
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|
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If
to any other Person who is then the registered
Holder:
|
To
the address of such Holder as it appears in the stock transfer books
of
the Company
|
or
such
Person may designate such other address as in writing hereafter in accordance
with this Section 7(g).
(h) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. The Company may not assign its rights or obligations hereunder without
the prior written consent of each Holder. Each Holder may assign his respective
rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement.
(i) Execution
and Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
(j) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of Delaware, without regard to the
principles of conflicts of law thereof. Each party agrees that all Proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement shall be commenced exclusively in the state
and
federal courts sitting in the County and State of
New
York. Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the County and State of New York
for
the adjudication of any dispute hereunder or in connection herewith or with
any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such Proceeding
is improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such Proceeding by mailing
a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to
him/it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a Proceeding
to
enforce any provisions of this Agreement, the Purchase Agreement or any
ancillary agreement, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such Proceeding.
-11-
(k) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(l) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
CONVERSION
SERVICES INTERNATIONAL, INC.
|
|
TAG
VIRGIN ISLANDS, INC.
as
agent for the Purchasers
|
||
|
|
|
|
||
|
|
|
|
||
|
By:
|
|
|
By:
|
|
|
Name:
|
Xxxxx
Xxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxxxxxx
|
|
Title:
|
President
|
|
Title:
|
President
|
-12-
SCHEDULE
I
SCHEDULE
OF PURCHASERS
|
Number
of
|
Number
of
|
||||||
|
Name
of Purchaser
|
Shares
|
|
Warrants
|
||||
|
Xxxxxxx
Xxxxxx Xxx
|
200,000
|
200,000
|
|||||
|
Xxxxxx
X. Xxxxxxxx
|
100,000
|
100,000
|
|||||
|
Xxxxxx
Xxxxx
|
200,000
|
200,000
|
|||||
|
Xxxxxx
Trop
|
120,000
|
120,000
|
|||||
|
Xxxxx
Xxxx XXX
|
120,000
|
120,000
|
|||||
|
Xxxxx
X Xxxxx Revocable Trust
|
120,000
|
120,000
|
|||||
|
Non-Marital
Trust FBO
|
|||||||
|
Xxxxxxx
Xxxxx
|
160,000
|
160,000
|
|||||
|
Xxxxxxxx
Xxxx Deutch Rev Tr
|
185,000
|
185,000
|
|||||
|
Xxxx
Xxxxxx Marital Trust B
|
200,000
|
200,000
|
|||||
|
R
Xxxxxx C/F Xxxxxx Xxxxx Xxxxxx
|
20,000
|
20,000
|
|||||
|
R
Xxxxxx C/F Xxxxx X Xxxxxx
|
20,000
|
20,000
|
|||||
|
Xxxxx
X. Xxxxx XXX Rollover
|
120,000
|
120,000
|
|||||
|
Xxxxxx
Living Trust
|
160,000
|
160,000
|
|||||
|
Xxxxxxxx
Xxxxxxxx
|
150,000
|
150,000
|
|||||
|
Total
|
1,875,000
|
1,875,000
|
|||||
-13-
EXHIBIT
A
[date]
|
[Address]
|
|
A
Registration Statement on Form S-1 or S-3 under the Securities Act of 1933(the
“Act”), with respect to the resale of the Shares was declared effective by the
Securities and Exchange Commission on [date]. Enclosed is the Prospectus dated
[date]. We understand that the Shares are to be offered and sold in the manner
described in the Prospectus.
Based
upon the foregoing, upon request by the Selling Stockholders at any time while
the registration statement remains effective, it is our opinion that the Shares
have been registered for resale under the Act and new certificates evidencing
the Shares upon their transfer or re-registration by the Selling Stockholders
may be issued without restrictive legend. We will advise you if the registration
statement is not available or effective at any point in the future.
-14-
Schedule
7(b)
Xxxxx
Xxxxxx
Xxxxx
Xxxxxxx
Xxxxxx
X.
XxXxxxx
Xxxxxxx
XxXxxxxx
Investors
represented by Taurus Advisory Group, LLC
Laurus
Master Fund, Ltd.
Xxxxxxx,
Ltd.
Certain
employees of Evoke Software Corporation approximating 286,000
shares
-15-
